Boehner, House Republicans Demand Spending Cuts for Payroll Tax Bill

WASHINGTON — Top House Republicans rebelled Sunday against a bipartisan, Senate-approved bill extending payroll tax cuts and jobless benefits for two months, reigniting a politically fueled holiday-season clash that had seemed all but doused.

The House GOP defiance cast uncertainty over how quickly Congress would forestall a tax increase otherwise heading straight at 160 million workers beginning New Year's Day. House Speaker John Boehner, R-Ohio, said it could be finished within two weeks, which suggested that lawmakers might have to spend much of their usual holiday break battling each other in the Capitol.

A day after rank-and-file House GOP lawmakers used a conference call to complain about the Senate-passed bill, Boehner said he opposed the legislation and wanted congressional bargainers to craft a new, year-long version.

"The president said we shouldn't be going anywhere without getting our work done," Boehner said on NBC's "Meet the Press," referring to President Barack Obama's oft-repeated promise to postpone his Christmastime trip to Hawaii if the legislation was not finished. "Let's get our work done, let's do this for a year."

A spokeswoman for House Majority Leader Eric Cantor, R-Va., said the House would vote Monday to either request formal bargaining with the Senate or to make the legislation "responsible and in line with the needs of hard-working taxpayers and middle-class families."

Cantor spokeswoman Laena Fallon did not specify what those changes might be, beyond a longer-lasting bill. Boehner, though, expressed support for "reasonable reductions in spending" in a House-approved payroll tax bill and for provisions that blocked some Obama administration anti-pollution rules.

Democrats leaped at what they saw as a chance to champion lower- and middle-income Americans by accusing Republicans of threatening a wide tax increase unless their demands are met. If Congress doesn't act, workers would see their take-home checks cut by 2 percentage points beginning Jan. 1, when this year's 4.2 percent payroll tax reverts to its normal 6.2 percent.

"They should pass the two month extension now to avoid a devastating tax hike from hitting the middle class in just 13 days," said Dan Pfeiffer, the White House communications director. "It's time House Republicans stop playing politics and get the job done for the American people.

House Minority Leader Nancy Pelosi said by opposing the Senate bill, "Tea party House Republicans are walking away once again, showing their extremism and clearly demonstrating that they never intended to give the middle class a tax cut," said House Minority Leader Nancy Pelosi, D-Calif.

Adam Jentleson, spokesman for Senate Majority Leader Harry Reid, said the Nevada Democrat would be "happy to continue negotiating a yearlong extension as soon as the House passes the Senate's short-term, bipartisan compromise to make sure middle-class families will not be hit by a thousand-dollar tax hike on January 1."

Keeping this year's 2 percentage point payroll tax cut in effect through 2012 would produce $1,000 in savings for a family earning $50,000 a year. The two-month version would be worth about $170 for the same household.

On Saturday, the Senate voted 89-10 for its legislation, which was negotiated by Senate Republican and Democratic leaders and backed by solid majorities of senators from both parties. It would provide a two-month extension of the payroll tax cuts and jobless benefits and prevent scheduled 27 percent cuts to doctors' Medicare reimbursements during that period, reductions that could convince physicians to stop treating elderly patients covered by the program.

That measure was praised by Obama, and even Senate Minority Leader Mitch McConnell, R-Ky., expressed optimism that the measure would become law. Initial bills produced by both sides lasted for a year, but negotiators working on the final product could not agree to savings that would finance such a measure, likely to cost roughly $200 billion.

Reid and Sen. Charles Schumer, D-N.Y., the No. 3 Senate leader, said Boehner had asked McConnell and Reid to negotiate a compromise, seemingly suggesting that Boehner had walked away from a deal. Republicans said that is untrue and said the House GOP played no role in last week's bargaining between the Senate leaders.

The Senate bill included language cherished by Republicans giving Obama 60 days to approve an oil pipeline stretching from western Canada's tar sands to Texas Gulf Coast refineries, unless he declared the project hurt the national interest. GOP leaders had thought that provision would assure enough votes to pass the overall legislation.

Obama had previously said he was delaying a decision on the Keystone XL pipeline until 2013, allowing him to wait until after next November's elections to choose between unions favoring the project's thousands of jobs and environmentalists opposed to its potential pollution and massive energy use. Obama initially threatened to kill the payroll tax bill if it included the pipeline language but eventually retreated.

Despite the Keystone provision, House Republicans used a Saturday conference call to express anger about the Senate bill and frustration that their leaders seemed willing to agree to the compromise, participants said. Many demanded a return to some of the House bill's spending cuts, including reductions in Obama's health care overhaul law of last year, and several expressed a willingness to work through the holidays to revamp the legislation, Republicans said.

Though GOP leaders support extending the payroll tax and jobless benefits, some House Republicans question doing that, arguing it won't produce jobs and could weaken Social Security. The payroll tax, subtracted from workers' paychecks, is used to finance Social Security.

The Senate adjourned Saturday and is not scheduled to conduct legislative work until late January. That could potentially complicate quick work on a revised payroll tax bill because all 100 senators would have to agree to let the Senate hold any votes before then.